12/10/2023
โผ๏ธKNOWLEDGE TIPSโผ๏ธ
๐กHow to Transfer Real Estate Titles in the Philippines (From a Sale) ๐ก
Too often, when thereโs a problem with the documents of a piece of land, it can be traced back to an improper transfer of ownership. And this simple mistake is the root cause of very long court proceedings in a lot of cases.
When the Title to a property is not properly transferred to the the new owner, it likely becomes a cause of conflicting claims in the future. It costs a lot of resources โ not only money, but also time and energy โ to resolve this when a long period of time has already passed.
โผ๏ธSituations you donโt want to get into โผ๏ธ
Below are some problematic situations weโve seen from previous and existing clients. And Iโm sure you donโt want to get into any one of them, so I recommend reading the rest of this post.
๐ด A sale of a property between two strangers. They only executed a Deed of Absolute Sale but the buyer did not proceed to transfer the Title to his name. The sale was not even registered with the Registry of Deeds.
Many years later, the buyer died and his children assumed ownership of the property, also without completely processing the transfer of Title.
When the seller also died, his children settled his estate. Included in there was the property already sold to the above mentioned buyer. A new Title was released for the property, in the name of one of the sellerโs children.
There are now conflicting claims between the children of the seller and the children of the buyer.
๐ด A Transfer Certificate of Title issued to a person without complete supporting documentations. It turned out that this new Title was issued with the help of an insider โcontactโ or โconnectionโ from the concerned government agency. But the supporting documents are lacking.
A buyer bought the property relying on the authenticity of the said Title. Now, when he tried to transfer it to his name, the supporting documents for the previous transfer were required. They are nowhere to be found, soโฆ big problem.
(Side note: This is why an independent Title Verification is very important before buying a property from an individual seller.)
๐ด A sale of a property by a corporation to an individual buyer. After completing his payment, the buyer did not proceed to complete the transfer of the Title to his name. The Deed of Sale was not registered and not even notarized.
Years later, the corporation dissolved. Now the buyer wants to process the transfer of Title to his name. But in getting the Deed of Sale notarized, nobody can sign the documents in behalf of the corporate seller because the corporation is not existing anymore. Again, a big problem.
We have some more examples of these troubled situations involving real property Titles. But the above should be enough to give you an idea of how important it is to transfer Titles properly.
So, below is a practical and step by step guide on how to properly process a transfer of Title subsequent to a sale.
Important note: There are several different modes of transferring ownership of a real property. It can be through a sale, donation, exchange, inheritance, and others that are more complicated. Each of these modes has different sets of documentary requirements. The one Iโll be describing here is for a sale.
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THE PROPER AND COMPLETE PROCESS
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๐ข I. Preparation
๐ธ1. Prepare the necessary documents for ex*****on of Deed of Sale:
๐น Deed of Absolute Sale (or other variants, as appropriate in your case)
๐น Acknowledgment of Payment (from buyer to seller)
๐น Affidavit of non-tenancy and/or no pending case (as appropriate)
๐น Affidavit of land holdings by the buyer (as applicable)
๐ธ2. Signing of documents.
Both parties should sign the following:
๐น Deed of Absolute Sale
๐น Acknowledgment Receipt of Payment by the buyer to seller
The seller should sign the:
๐น Affidavit of non-tenancy and/or no pending case
The buyer should sign the:
๐น Affidavit of land holdings
๐ธ3. Secure the following documents to be needed later:
๐น 2 government-issued IDโs of both the seller and the buyer
๐น Tax Identification Number (TIN) of each party
๐น Original Ownerโs duplicate of Title
๐น Marriage contract, if applicable
๐น Previous Certificate Authorizing Registration (CAR)
๐น Tax declaration
๐น Receipt(s) of Real Property Tax (RPT) payments
๐น Special Power of Attorney (SPA), if dealing with an attorney-in-fact (an authorized representative)
๐ธ4. Notarization of documents โ all documents signed by the parties should be notarized.
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๐ข II. Secure payment computations and certified copies of the following documents.
๐ธ1. Bureau of Internal Revenue (BIR):
๐น Secure computation of fees for Documentary Stamp Tax (DST) and for
๐น Capital Gains Tax (CGT)
Notes: Go to ONETT for DST and CGT computation; ask for the specific payee to be named in the managerโs check (if paying in check); and take note of their accredited banks, so youโll know where to submit the payments.
๐ธ2. City (or Municipal) Treasurerโs Office:
๐น Secure computation of Transfer Tax
๐น Secure Tax Clearance
Notes: Ask for computation of the Transfer Tax; ask for the specific payee to be named in the managerโs check for payment (if paying in check).
๐ธ3. City (or Municipal) Assessorโs Office:
๐น Secure Certified True Copy of the Tax Declaration
๐ธ4. Registry of Deeds:
๐น Secure computation of Registration Fee
๐นSecure Certified True Copy of the existing Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT), as appropriate
Notes: Ask for computation of the Registration Fee; ask for the specific payee to be named in the managerโs check for payment (if paying in check).
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๐ข III. Preparation of payments.
Now that you know the exact fees that you will have to pay, you should prepare these amounts. These fees are preferrably paid using managerโs checks. But you can also pay them in cash.
Take note of the following deadlines for the settlement of these fees.
๐ธ1. BIR:
๐นCGT โ 30 days after the date of notarization of the Deed of Sale
๐นDST โ 5th day of the following month from notarization of the Deed of Sale
๐ธ2. City Treasurerโs Office:
๐นTransfer Tax โ 60 days from date of ex*****on of Deed of Sale or the Acknowledgment of Payment
๐ธ3. Registry of Deeds:
๐นRegistration Fee โ 1 year from the date of release of CAR from BIR + 6 months extension if approved by BIR upon due submission of request
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๐ข IV. Process payments to BIR.
๐ธ1. Present the following requirements to ONETT to obtain the official Computation Sheet:
๐นCertified True Copy of the Title (TCT or CCT)
๐นCertified True Copy of the Tax Declaration
๐นIDs of the buyer(s) and the seller(s)
๐นTIN of the buyer(s) and the seller(s)
๐นFilled-out online DST & CGT BIR Forms
๐นDeed of Sale
๐นAcknowledgment of Payment
๐ธ2. Pay the DST & CGT at the Accredited Agent Bank (AAB) of the BIR-RDO (Revenue District Office)
๐นFill out the bank form for the BIR payments
๐นPresent the verified DST & CGT BIR returns together with the MCs (or cash payment) and the bank form
๐นDonโt forget the transaction slip!
๐ธ3. Then go back to BIR to file the above listed documents together with the transaction slip for the processing of the new CAR
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๐ข V. Process payment to the City Treasurer.
๐ธ1. Present the following requirements to the Officer in Charge (OIC):
o Deed of Sale
o IDs of the buyer(s) and the Seller(s)
๐ธ2. Submit managerโs check or cash payment to the designated cashier.
๐ธ3. Bring the receipt to the OIC together with the above mentioned documents to process the Transfer Tax Clearance.
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๐ข VI. Process payment to the Registry of Deeds.
๐ธ1. Fill out an application form for transfer of Title and present the following requirements to the Examiner of the Day:
๐นCAR from the BIR
๐นDeed of Sale
๐นTransfer Tax Clearance
๐ธ2. Submit the managerโs check or cash payment to the cashier for the registration. Then attach the receipt to the application form together with the documents stated above.
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๐ข VII. Follow up with the Registry of Deeds.
๐ธ1. Contact the assigned examiner for the progress of your application for new Title.
๐ธ2. Once the new title has been released, file a copy with the City Assessorsโ Office.
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๐ข VIII. New Tax Declaration.
๐ธ1. Finally, when the new Title under the buyerโs name is already released, present it to the Assessorsโ Office for the issuance of the new Tax Declaration.
๐ธ2. Congratulations! Youโve now completed the proper transfer of Title.
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PARTING REMINDERS
Great care and attention to small details are required in this process. You are also going to need a lot of patience as this will involve a lot of waiting and sometimes long queues.
Little mistakes along the way may cause major delays and possible serious issues in the future. So please be careful to save yourself a lot of trouble. If thereโs anything you are not sure about, ask questions to relevant persons, not just to anyone.
Also, if youโre in doubt as to whether an original or only a copy of a document is required, just bring the original. You can just make copies there if only copies are needed.
